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Scott Smith speaks during a news conference in Vancouver on Dec. 1, 2016.DARRYL DYCK/The Canadian Press

Hockey Canada is halting the use of a special multimillion-dollar fund, which it built through player registration fees, to settle claims of alleged sexual assault.

The move follows a Globe and Mail investigation this week that revealed Hockey Canada put registration fees it collected for insurance into a fund for settlements, but did not disclose to players and parents how some of that money was being used.

The account, known internally as the National Equity Fund, allowed Hockey Canada to settle a variety of claims on its own without an investigation by its insurance company and outside of the courts.

The fund exceeded $15-million in recent years, The Globe investigation found, although very little was disclosed about how it operated, and some of the money went towards settling sexual assault claims. Hockey Canada could use the money at its discretion with little outside scrutiny.

“Effective immediately, the National Equity Fund will no longer be used to settle sexual assault claims,” Hockey Canada said in a statement on Wednesday.

“Hockey Canada recognizes we have significant work to do to rebuild trust with Canadians. We know we need to hold ourselves accountable,” the statement said. The organization has announced a full governance review that will include the National Equity Fund.

“While we respect that process, we also recognize some actions cannot wait,” the statement said.

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The announcement is a sudden shift for Hockey Canada, which is facing criticism for its handling of an alleged sexual assault involving eight hockey players, including members of the 2018 Canadian World Junior team.

The Globe obtained documents that showed the fund carried a balance of $8.9-million in 2021, and contained as much as $15.6-million in 2016. It also earned more than a million dollars some years in interest and investment revenue from stocks and bonds.

At recent federal hearings, Hockey Canada chief executive officer Scott Smith said Hockey Canada did not use federal funds to settle a $3.55-million lawsuit stemming from the alleged 2018 sexual assault. Mr. Smith said the organization “liquidated a portion of our investments” to settle for an undisclosed amount.

He did not give details on where the money came from.

Hockey Canada confirmed the existence of the fund last week when The Globe, citing court documents and financial records, asked about its operations and how the money was deployed. The Globe found Hockey Canada used the National Equity Fund to pay out settlements on alleged sexual assaults and other cases at its discretion, without involving its insurance company.

Revelations about the fund raised new questions about how Hockey Canada handles sexual assault cases at a time when it has been accused by federal MPs of trying to sweep the alleged sexual assault in 2018 under the rug without a full or proper investigation.

In a statement of claim filed earlier this year, a woman identified as E.M. alleged she engaged in sex with a player at a hotel in London, Ont., after a Hockey Canada event that summer, but did not consent to sex with other players who entered the room. The allegations have not been proven in court. Lawyers for several of the unnamed players dispute the claim.

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At the hearings in Ottawa, Mr. Smith said Hockey Canada couldn’t determine what transpired or which players were alleged to be involved, despite deciding to pay out the claim.

Based on the timeline put forward by Mr. Smith, Hockey Canada settled the lawsuit a few weeks after being informed of it, and without having completed an investigation into the matter.

Asked why the organization moved so quickly to settle, despite not being able to determine the facts, former Hockey Canada CEO Tom Renney told the hearings they believed it was best for the alleged victim.

Mr. Smith also told the hearings Hockey Canada has dealt with one to two sexual assault cases a year for the past six years, which led MPs in Ottawa to ask how many settlements it has paid in the past without scrutiny.

The Globe found Hockey Canada charges players, from beginner Timbits Hockey to senior leagues, $23.80 for insurance, administration and other fees. However, it did not disclose that some of the money went toward settling claims of sexual assault that are deemed uninsurable or do not involve the insurer investigating.

After The Globe’s investigation was published, Prime Minster Justin Trudeau criticized Hockey Canada on Tuesday.

“What we’re learning today is absolutely unacceptable,” Mr. Trudeau said. “I think right now it’s hard for anyone in Canada to have faith or trust in anyone at Hockey Canada.”

He echoed the thoughts of hockey parents who have told The Globe they are upset to learn their child’s registration fees may have contributed to such settlements.

“A few years ago, I had my son in hockey, and when I think about the culture that is apparently permeating the highest orders of that organization, I can understand why so many parents, so many Canadians who take such pride in our national winter sport, are absolutely disgusted by what’s going on,” Mr. Trudeau said.

Hockey Canada said the fund will be exclusively dedicated towards safety, wellness and equity initiatives, as well as insurance.

Between 2014 and 2021, 98 per cent of the fund’s resources went toward those items, the statement said. Also covered were expenditures such as counselling and treatment for players, concussion research grants to the Canadian Hockey League, criminal record checks of Hockey Canada staff, donations to Kids Help Phone, and safety initiatives.

It is unclear to what extent these uses of the fund are disclosed to parents when registration fees are collected.

Hockey Canada is now undertaking a review of its governance and may set up a fund to support sexual assault victims that would be subject to outside scrutiny.

“Should the review determine that a fund to support victims of sexual assault is required, as is common in other sporting organizations, we will ensure all claims are subject to the approval of an independent third-party,” Hockey Canada said in the statement.

“Canadians have been loud and clear: you expect our national sport and those representing it to work hard to earn your trust each day. We have heard you and are committed to making the changes necessary to allow us to be the organization you expect us to be, and to restore your confidence and trust in us.”

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